Ouch: 6 Million Uninsured Americans Will Pay 'Obamatax'

Kate Hicks

9/19/2012 6:24:00 PM - Kate Hicks

Months out from the Supreme Court's ruling on the Affordable Care Act, and Americans bombarded by mile-a-minute election coverage, it's easy to forget that ACA implementation is creeping up on us. But today, in a great reminder of the real struggles that we'll still face after November 6th, the Congressional Budget Office released a new estimate of how many will be paying taxes for going without insurance. And, fitting the holding pattern, the number is higher than previously expected.

Overall, 6 million Americans will pay "Obamatax," as some have called it. These are middle class individuals, without insurance because their employer may dropped it owing to expenses, and they're unable to afford it themselves. Furthermore, they're just a sliver of the 30 million Americans who will still have zero health insurance to speak of, affordable or otherwise. The remainder of the uninsured, to whom the tax doesn't apply, either are illegal aliens (so the ACA doesn't apply to them), or they don't make enough to pay income taxes.

The agency said the government will collect about $7 billion from the tax in 2016, and $8 billion a year thereafter.

The projections apply to 2016, the point at which most of President Obama’s health care law will be implemented and the penalty for failing to buy coverage will have risen to its full amount of $695 per person or 2.5 percent of household income, whichever is greater.

The agency gave several reasons for revising its projections. For one thing, Congress has passed legislation requiring Americans to pay back more health insurance subsidies if they’re overpaid, making buying coverage less attractive.

And some low-income Americans may have less access to expanded Medicaid programs than originally expected. Several states are expected to opt out of expanding Medicaid, after the Supreme Court ruled in June that the government can’t respond by stripping away all their funding for the program.

The economy is also improving more slowly than expected, leading to lower wages and salaries that could make it harder to buy coverage.

Since 10% of the country still won't be insured, and a number of those people will be paying the government billions a year in taxes -- thereby costing them more money they don't have -- it's safe to say this law hasn't actually made "care" any more affordable. (Scare quotes employed because, of course, the law's premise was widely flawed in conflating "care" with the very different concept of "insurance," the issue it actually addresses.) It's just another broken promise, which does almost nothing to fix the country's still-broken healthcare system.